SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 4, 1997
CPI CORP.
________________________________________________________________
(exact name of registrant as specified in its charter)
Delaware 0-11227 43-1256674
________________________________________________________________
(State or other jurisdiction (Commission file (IRS Employer
of incorporation) Number) Identification No.)
1706 Washington Avenue, St. Louis, Missouri 63103-1790
________________________________________________________________
(Address of principal executive offices) (Zip code)
Registrants's telephone number, including area code (314)231-1575
________________________________________________________________
________________________________________________________________
(Former name or former address, if changes since last report.)
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ITEM 5. OTHER EVENTS
On April 4, 1997, CPI Corp. issued the following press release
announcing the fourth quarter and fiscal 1996 results.
CPI REPORTS FOURTH QUARTER AND FISCAL 1996 RESULTS
- - Fourth-quarter and full-year sales reflect growth in Portrait
Studio and Wall Decor segments. However, total company
revenues were lower in both time periods, reflecting the sale
of a majority interest of the Photofinishing division to
Kodak.
- - Portrait Studio earnings increase for the quarter, but
decline for the year.
- - Annual EPS from continuing operations of $1.06 vs. $1.26 in
1995; (1995 net EPS of $1.02 including discontinued
operations).
St. Louis, MO, April 4, 1997 -- CPI Corp. (NYSE-CPY) today
reported FY 1996 results from continuing operations, with sales
of $467.0 million compared with the prior year's $526.7 million.
The lower revenues reflect the sale of a 51% interest in the
company's Fox Photo, Inc. photofinishing division to Eastman
Kodak Company in October 1996, with subsequent revenues of that
business being reported by the joint venture.
CPI's earnings from continuing operations were $14.4 million, or
$1.06 per share, compared with $17.6 million in FY 1995, or
$1.26 per share. The 1996 earnings included a gain, net of
taxes, of $3.9 million, or $0.29 per share, from the sale of
the interest in Fox Photo. Net earnings in the prior year,
including discontinued operations, were $14.3 million, or $1.02
per share. While net earnings were approximately equal in both
years, EPS were higher in 1996 because of 3.4% fewer weighted
average shares outstanding due to the repurchase of 2.25 million
shares in November 1996.
The Portrait Studio and Wall Decor segments recorded fourth
quarter sales gains of 8.3% and 5.1%, respectively. Total
recorded revenues of $111.5 million as compared to the prior
year's $150.0 million reflect the elimination of Photofinishing
revenues. Earnings from continuing operations were essentially
flat at $12.3 million. However, earnings per share -- because
of 15.3% fewer weighted average shares outstanding -- were $1.03
in the fourth quarter of 1996 compared to $0.88 in 1995. Net
earnings, including discontinued operations, were $9.6 million
in 1995 compared to $12.3 million in 1996.
<PAGE>
Discussing the PORTRAIT STUDIO segment, Alyn V. Essman, chairman
and chief executive officer, said, "We experienced increased
customer traffic during the fourth quarter, resulting in moderate
growth in sales and operating earnings. However, the increases
were not enough to overcome the shortfalls sustained in the
first three quarters. Portrait Studio sales for the full year
increased to $289.8 million compared with $279.6 million, but
due to higher operating expenses, the year's operating earnings
declined to $35.7 million from the previous year's $42.6
million."
Regarding the PHOTOFINISHING segment, Essman said, "Recorded
revenues for the 35 weeks through October 4, 1996 consummation
of the joint venture were $114.5 million compared with the full
prior-year total of $188.4 million. Pre-venture operating
earnings were $82,000, and CPI's minority share of the 17 weeks
of post-venture operations was a loss of $485,000. In fiscal
1995, full-year earnings were $3.3 million.
"Sales in the WALL DECOR segment for the year increased 6.7% to
$62.7 million compared to $58.7 million, with growth mainly due
to the opening of 12 new stores during the year. Operating
earnings declined to $3.3 million from last year's $5.4 million,
primarily due to lower same-store sales. In addition,
operating earnings were impacted by the expenses of converting
selected stores to an expanded custom framing format and the
opening of new stores," he added.
CPI is a consumer services company currently operating
approximately 1,200 retail locations, including 1,032 Sears
Portrait Studios in the U.S., Puerto Rico and Canada, and 156
Prints Plus wall decor locations. The Fox Photo joint venture
operates 484 photofinishing locations.
<PAGE>
<TABLE>
CONDENSED STATEMENTS OF EARNINGS - FOR THE 12 AND 52 WEEKS ENDED
FEBRUARY 1, 1997 AND FEBRUARY 3, 1996 (in thousands except per
share amounts - unaudited)
<CAPTION>
12 Weeks Ended 52 Weeks Ended
--------------------- ---------------------
02/01/97 02/03/96 02/01/97 02/03/96
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net Sales:
Portrait studios $ 90,186 $ 83,309 $ 289,840 $ 279,518
One-hour
photofinishing - 46,472 114,518 188,408
Wall decor 21,305 20,265 62,676 58,725
---------- ---------- ---------- ----------
Total net sales $ 111,491 $ 150,046 $ 467,034 $ 526,651
Operating earnings:
Portrait studios $ 19,547 $ 18,793 $ 35,656 $ 42,612
One-hour
photofinishing - 2,247 82 3,301
Wall decor 4,750 4,930 3,252 5,357
---------- ---------- ---------- ----------
Total operating
earnings 24,297 25,970 38,990 51,270
General corporate
expense 4,198 6,223 18,618 19,598
---------- ---------- ---------- ----------
Income from
operations 20,099 19,747 20,372 31,672
Net interest expense 616 939 3,769 4,597
Minority interest
in affiliate (55) - (485) -
Gain - - 6,180 -
Other income 21 258 501 563
---------- ---------- ---------- ----------
Earnings from
continuing
operations before
income taxes 19,449 19,066 22,799 27,638
Income tax expense 7,196 6,806 8,436 9,979
---------- ---------- ---------- ----------
Net earnings from
continuing
operations 12,253 12,260 14,363 17,659
---------- ---------- ---------- ----------
Losses from
operations net of
income tax
benefits - (253) - (898)
Loss on disposal net
of income tax
benefits of $1,372 - (2,428) - (2,428)
---------- ---------- ---------- ----------
Total losses from
discontinued
operations - (2,681) - (3,326)
---------- ---------- ---------- ----------
Net earnings $ 12,253 $ 9,579 $ 14,363 $ 14,333
========== ========== ========== ==========
</TABLE>
<PAGE>
<TABLE>
CONDENSED STATEMENTS OF EARNINGS - FOR THE 12 AND 52 WEEKS ENDED
FEBRUARY 1, 1997 AND FEBRUARY 3, 1996 (in thousands except per
share amounts - unaudited) (continued)
<CAPTION>
12 Weeks Ended 52 Weeks Ended
-------------------- --------------------
02/01/97 02/03/96 02/01/97 02/03/96
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Earnings (loss) per
common share:
From continuing
operations $ 1.03 $ 0.88 $ 1.06 $ 1.26
From discontinued
operations - (0.19) - (0.24)
---------- ---------- ---------- ----------
Net earnings
per common share $ 1.03 $ 0.69 $ 1.06 $ 1.02
========== ========== ========== ==========
Weighted average
number of common
and common
equivalent shares
outstanding 11,861 14,005 13,518 13,989
========== ========== ========== ==========
</TABLE>
<TABLE>
CONDENSED BALANCE SHEETS - FOR FEBRUARY 1, 1997 AND FEBRUARY 3,
1996 (in thousands - unaudited)
<CAPTION>
FEBRUARY 1, FEBRUARY 3,
1997 1996
----------- -----------
<S> <C> <C>
Assets
Current assets:
Cash and short-term investments $ 21,923 $ 8,331
Other current assets 41,762 64,494
Net property and equipment 130,762 167,944
Minority interest 48,105 -
Net assets of business
held for sale - 5,055
Other assets 4,168 54,664
---------- ----------
Total assets $ 246,720 $ 300,488
========== ==========
Liabilities and stockholders' equity
Current liabilities $ 50,847 $ 64,013
Long-term obligations 44,888 54,804
Other liabilities 11,460 7,503
Stockholders' equity 139,525 174,168
---------- ----------
Total liabilities and
stockholders' equity $ 246,720 $ 300,488
========== ==========
</TABLE>
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
CPI CORP.
(Registrant)
/s/ Barry Arthur
-----------------------------
Barry Arthur
Authorized Officer and
Principal Financial Officer
Dated: April 11, 1997
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